Re: Mexico considering buying it's corn elsewhere

Posted by Paul on February 17, 2017 at 06:50:27 from (76.77.197.114):

In Reply to: Mexico considering buying it's corn elsewhere posted by rockyridgefarm on February 17, 2017 at 06:28:15:

In any negotiations there will be some sabre rattling and discussions of this or that might cause that or this.

We live on a planet that grows X amount of grains and mouths that consume X amount of food.

It mostly is gonna balance out after the dust settles, either way. Mexico has pretty good (i.e. Cheap) transportation of grains from USA to where
they need the grain. Shipping it in from South America would cost them extra. But they certainly can do that.

It would leave less South American grain for China to import, and so China would likely need to import more USA grain.

Certainly any market fluctuations will cause a ripple, and this stuff will likely depress grain prices a tad for the time being. Unstable news always
bothers investors; and investors (The Funds) are driving grain prices more often than not the past 5 years.

So sure it will have an effect.

Long term, we probably end up with better trade deals with several of our major trading partners and the USA ecconomy gets a small boost and
grain ends up worth a tad more down the road. If the USA is in better shape thrn our citizens can pay more for food, after all, our primary
customers.

Lower grain prices use up surpluses, creating a bigger demand and higher prices. So if prices go down briefly, it will use up some stockpiles
and discourage expansion of ag in other countries....

So - what is the net effect?

Probably not all that much, if you plan on farming the next 5 years and aren't paying $350 an acre rent and have yourself mortgaged to the hilt.
Then this might actually be good news long term.

But it will make some ups and downs along the way for sure.

And there is always a possibility something gets out of hand and creates a longer term issue, as Nixon and Carter both created for USA
farmers. I won't discount that ever happening again, but at this point it seems the goal is better trade deals, not worse ones for the USA.

Paul

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